BUSINESS IN BRIEF 20/11
Car lovers flock to Viet Nam Motor Show
The 10th Viet Nam Motor Show 2014 (VMS) kicked off in HCM City yesterday and attracted 18 renowned automobile companies, the largest number of participants in any Vietnamese car show.
The three-day event featured world-famous brands such as Ford, GM, Honda and Mercedes-Benz, as well as Suzuki, Toyota, Mitsubishi and Nissan. Audi, BMW and Jaguar Land Rover likewise attended.
The show, which the Viet Nam Automobile Manufacturers Association (VAMA) organised, also introduced hundred of parts and accessories, as well as insurance and financing companies. It expects to attract 150,000 visitors.
"We hope the show will be a real chance for auto marketing and serve as a place for auto makers to showcase their latest products and technologies, as well as get feedback from customers," said VAMA chairman Jesus Metelo Arias.
Arias, also Ford Viet Nam's general director, added that auto makers would likewise be introducing the latest convenient and environment-friendly models to Vietnamese consumers.
Honda Viet Nam was the first car company to showcase its products yesterday morning, including the latest version of its City and Accord sedans, CR-V SUV and NXS-1 concept car.
Mitsubishi Motors, Honda's compatriot, brought to the show a wide range of products, including the hatchback, sedan, crossover and SUV, as well as pick-up and plug-in hybrid electric vehicles.
British flagship brands Jaguar and Land Rover unveiled their latest version of Range Rover Sport, All-New Range Rover and Range Rover Evoque.
Auto parts and accessories suppliers also introduced advanced and environment-friendly products.
Last month, the country's 18 leading vehicle manufacturers sold a combined total of 14,938 units, a 45-per cent year-on-year increase that represents the 19th consecutive month that industry volume has been higher than that of the same period last year.
Sales from January to October increased by 40 per cent year-on-year to 121,648 units.
Meanwhile, from January to October, the country imported 51,000 cars worth $1.1 billion, a 76-per cent increase in quantity and 93-per cent increase in value year-on-year.
Viet Nam, which has a population of more than 90 million, has about two million cars and 37 million motorcycles.
Citimart to work with Aeon Group
Giant Vietnamese retailer Citimart announced business co-operation with Japan's Aeon Group in HCM City late last week.
Nearly 30 Citimart supermarkets nationwide would be renamed AeonCitimart, Citimart's marketing manager Lam Kien Dat said, adding that his group would not sell its shares to the Aeon Group.
Dat said that the Aeon Group would transfer their technology and experience to Citimart to develop a network of retailers across the country.
In the first phase, about 500 food and consumer products with the brand name Top Value would be sold at Citimart supermarkets.
Dat said that the two sides aimed to set up 500 large and small supermarkets nationwide by 2025, in which the Aeon Group would have about 10,000 products.
Vingroup revenue increases 86%
Vingroup has announced a net revenue of VND21.524 trillion (US$1.007 billion) for the first nine months of 2014, an 86 per cent year-on-year increase.
The firm, which is Viet Nam's largest property developer and mall operator, also announced after-tax profit of VND3.4 trillion ($160.8 million) for the first nine months, an increase of 82 per cent year-on-year.
According to the group's representative, most of the revenue was from real estate deals and their services.
In particular, during the third quarter this year, all core businesses of Vinhomes, Vincom Retail and Vinpearl, besides Vinmec contributed significantly to the company's strong revenue growth. The net revenue from the sale of inventory properties was VND6.144 trillion ($288.4 million), accounting for 80 per cent of the quarter's revenue.
VN start-ups win Israel contest
Four Vietnamese start-ups were named as the winners of the Start-up Israel 2014 competition on Monday.
The four Internet and mobile technology start-ups are Chomp, BraveBits and Younet, as well as Umbala.
Chomp, one of the nine start-up enterprises that receive support in the Silicon Valley Viet Nam Project, provides solutions on social networks to help marketers approach and interact effectively with targeted customers. BraveBits is completing an e-commerce product called hiSella that helps shop-owners track their customers on Facebook and get information on their best-selling products. Younet has developed a cloud computing-based website called SocialHeat to collect and analyse automatically the comments of users of social networks and other websites.
Umbala is a mobile application that helps create 12-second videos with special effects that can be shared on popular social networks such as Facebook, Instagram and Twitter.
MoF urges simpler customs procedures
The Ministry of Finance (MoF) has asked 11 concerned ministries to join hands in simplifying administrative procedures to create the most favourable conditions for import-export activities.
In particular, the MoF has asked the ministries to review and issue their list of import-export items to be subjected to quarantine to avoid environmental pollution, including animals, plants and health care products, as well as toxic chemicals and pesticides.
Upon the request of the MoF, the General Department of Customs (GDC) has made every effort to shorten customs declaration procedures to make it easier for businesses.
In recent years, the GDC finished a draft plan to improve the effectiveness and efficiency of specialised inspections of imports and exports at the border gates with new features to facilitate and manage import and export activities. The draft plan aims to set up specialised inspection centres at the border gates, where a large volume of imports and exports need to be checked every day.
Under the plan, from now till 2020, the GDC will focus on building two centres in the cities of Hai Phong and HCM and three others at mainland border gates in the northern provinces of Quang Ninh, Lang Son and Lao Cai.
Customs staff are required to conduct specialised inspections by using optimised processes to get quick and accurate results and shorten customs clearance time for businesses.
On the other hand, importers and exporters with specialised goods for inspection should go through such centres to make the process quick and easy for them.
More consumers opt for bank cards
Vietnamese consumers were using 76.13 million bank cards as of October, up 15 per cent against December last year, according to statistics from the State Bank of Viet Nam.
This number included 68.08 million domestic cards and 8.05 million international cards.
While commercial banks offered several promotion programmes to encourage the use of credit cards, these accounted for barely 4 per cent of total bank cards. Only 3.04 million were credit cards while 69.83 million were debit cards and 3.26 million were pre-paid cards.
The growth rate of credit cards also declined from last year to 25 per cent.
The central bank also reported that the country had 15,809 automated teller machines (ATMs) by October, up 3.6 per cent against last year. This included 159,067 point of sale (POS) devices, up 23.1 per cent against last year.
The Government aims to cut cash payments from 14 per cent of all transactions in Viet Nam in 2011 to less than 11 per cent by the end of 2015.
The plan also focuses on the development of card payment services, with the aim of developing 250,000 POS that can accept about 200 million card payments per year by 2015.
Industry insiders said that bank cards were currently not widely accepted, and that electronic payment methods must be diversified to support the development of e-commerce in Viet Nam.
The SBV recently established an interbank electronic payment system connecting 66 members under the SBV and 463 branches of 94 credit institutions in order to create conditions for the development of e-commerce.
MobiFone to become a corporation
Prime Minister Nguyen Tan Dung has agreed with the proposal of the Ministry of Information and Communications to transform MobiFone One Member Company Ltd into a corporation.
The ministry will be responsible for carrying out the corporation's equitisation in accordance with current regulations and with a prime ministerial approval of the restructuring plan for Viet Nam Post and Telecommunications Corporation.
MobiFone was detached from the State-run Viet Nam Posts and Telecommunications Group (VNPT) and placed under the MIC management last July following a prime ministerial decision to restructure the VNPT. The company has a charter capital of VND12.6 trillion (US$600 million).
Ha Noi event promotes regional specialities
Ha Noi will host the first annual programme to promote regional specialities from November 28 to December 2.
The large-scale event will gather specialities from 40 cities and provinces, including processed seafood, candy, tea and coffee, fresh fruits and spices, according to director of the Ha Noi Trade Promotion Centre Nguyen Thi Mai Anh.
Visitors can taste a variety of produce items renowned for their quality. Some scarce items will only be available in limited quantity.
The Ha Noi Department of Trade and Industry initiated the programme with the goal of expanding markets for these unique regional products.
"In recent years, localities have made tireless efforts to promote their products but failed to do it thoroughly," department deputy director Tran Thi Phuong Lan said. "Consequently, the specialities haven't caught on among consumers in other areas."
A conference on enhancing value and developing trademarks will take place on November 29, as will an activity to connect enterprises in Ha Noi and other cities and provinces.
Thousands of visitors are expected to turn up at the Royal City Trade Centre in Thanh Xuan District to browse the 150 bamboo stalls, divided into geographic sections. For example, the Da Lat section will offer visitors a taste of Central Highlands culture and cuisine.
Economic counsellors from foreign diplomatic delegations have been invited to join the event, many representing key markets around the world, Anh said. The event will also see the participation of representatives of foreign enterprises, restaurants and hotels, distributors, producers and processors.
VN-ASEAN trade deficit exceeds $3b
Viet Nam saw a trade deficit of US$3.34 billion with other ASEAN countries over the first 10 months of the year.
Figures released by the General Department of Customs showed that the 10-month trade value between Viet Nam and ASEAN reached $34.67 billion, accounting for 14.1 per cent of the country's total import-export revenue. Viet Nam earned $15.66 billion from exporting goods to ASEAN nations, accounting for 12.6 per cent of the country's total export turnover.
The high turnover from exports to some large markets included $3.29 billion from Malaysia, $2.87 billion from Thailand and $2.35 billion from Indonesia, as well as $2.33 billion from Singapore and $2.13 billion from Cambodia.
Viet Nam's main exports to the bloc were crude oil, steel and equipment, besides spare parts, garment and textiles and seafood. In the 10-month period, the country's turnover from imports from ASEAN was $19 billion, equivalent to 15.6 per cent of its total import turnover.
Singapore was Viet Nam's largest ASEAN trade partner. The turnover from imports from Singapore was $5.86 billion, followed by Thailand with $5.79 billion, and Malaysia with $3.39 billion, as well as Indonesia with $2 billion.
The country's main imports were petroleum, wood and wooden items, and machines, equipment and spare parts, as well as other oil products.
In the January-October period, Viet Nam saw a trade deficit of $3.53 billion with Singapore, $2.95 billion with Thailand and $350 million with Indonesia.
In addition, the country achieved a trade surplus of $1.6 billion with Cambodia and $160 million with Myanmar.
Coffee output expected to crash this year
Coffee output for the 2014-15 crop is predicted to fall by 20 to 25 per cent over the previous crop because of unfavourable weather conditions, according to the Viet Nam Coffee and Cocoa Association.
It attributed the decrease to the negative impact of drought during the coffee growing season. The Cuu Long (Mekong) Delta region, in particular, had enough water for only 60 per cent of coffee-growing areas during the dry season, leading to the poor development of coffee berries and consequently, low output of coffee beans.
Meanwhile, long-term hoar frost has affected Arabica coffee trees in Da Lat and the provinces of Lam Dong and Son La, sparking predictions of a 30-per cent decline in coffee output there, the association added.
Also, the Western Highlands Agro-Forestry Science and Technical Institute (WASI) reported that old coffee trees with low output accounted for 30 per cent of the total area for growing coffee.
According to the Ministry of Agriculture and Rural Development, in the first months of 2014, coffee exports reached 1.49 million tonnes worth $3.1 billion, a 37.1-per cent increase in volume and 33.5-per cent increase in value year-on-year.
Recently, the Belgian market witnessed an increase in coffee imports from Viet Nam. However, Germany and the United States remained the two largest importers of Vietnamese coffee.
The association expected coffee output to reach 1.4 million tonnes, or about 23.3 million bags, with each bag weighing 60 kg, for the 2013-14 crop that began in October 2013 and ended last September.
For the 2013-14 crop, the nation is expected to experience a 20-per cent year-on-year increase in the export value of coffee to US$3 billion.
City strives to lure more investment
This southern city aims to continue speeding up administrative reforms, perfect key infrastructure facilities such as airports and seaports and ensure adequate funds for land purchase to attract more investments.
Top priority will be given to improving personnel resources especially in high-technology industries, speeding up investment promotion and solving difficulties in a timely manner for investors, said Lam Nguyen Khoi, deputy director of the municipal planning and investment department.
The city will also take bold measures to speed up slow-moving projects, especially those worth more than US$500 million, to prevent any negative influence on its investment climate, Khoi added.
Concerned departments and sectors will provide investors with the best support possible to ensure the implementation of their projects as scheduled.
But if investors lack sufficient finances and delay projects on purpose, bold measures become inevitable, warned the deputy director.
Khoi specified for priority investment several sectors and industries: banking and finance, trade and tourism, information and communications technology and real estate trading, as well as machinery and engineering, automotive, support and food processing.
In the past 10 months, HCM City topped the list of cities and provinces nationwide that have successfully attracted foreign direct investment with $2.97 billion, a 97.6-per cent year-on-year increase, according to a planning and investment department report.
From January to October 2014, city authorities granted licenses to 332 new foreign-invested projects worth $2.7 billion. In October alone, they granted a license to the $1.4-billion Samsung CE Complex project of Samsung Electronics.
The project, which aims to conduct research on, develop, and manufacture high-technology consumer electronics products, was the second $1-billion project at the Sai Gon Hi-Tech Park after the Intel chip factory project which was approved in 2006.
Dong Nai lures $1.4 billion in FDI
The southern province of Dong Nai's industrial parks have attracted US$1.4 billion in foreign direct investment (FDI) since the beginning of this year.
The figure increased by $500 million year-on-year and 55.6 per cent compared to the provincial yearly plan.
The province's 31 industrial parks cover an area of 9,559.35 hectares. In the first ten months, 163.12 hectares were hired, bringing the total area of hired land to 67.49 per cent.
Deputy head of the provincial Industrial Zones Authority Mai Van Nhon said the increase resulted from effective implementation of administrative reforms, which created favorable conditions for investors.
Big C opens Nha Trang outlet
French supermarket chain Big C last Saturday opened a hypermarket and mall in Nha Trang City, its 29th outlet in Viet Nam.
The 30,000sq.m Big C Nha Trang, which cost US$20 million, and uses green building concepts to save energy and protect the environment.
The hypermarket occupies 3,530sq.m and sells more than 28,000 items ranging from food and garment and textile to household utensils to electric appliances, 95 per cent of them locally produced.
The leased space in the lobby has nearly 100 boutiques and shops offering fashion goods, cosmetics, electronic equipment, entertainment, and food.
The new store will provide employment for about 500 local labourers.
Officials suggest rice firms improve quality, branding of products
Officials and experts have repeated the need to increase the quality of Vietnamese rice and promote a national brand as measures to ensure sustainable rice production in the country.
Addressing a conference discussing policies needed to boost the domestic rice industry, Tran Cong Thang, deputy director of the Institute of Policy and Strategy for Agriculture and Rural Development, said Viet Nam recorded significant achievements in the past with production going up from just 16 million tonnes in 1998 to 44 million tonnes in 2013.
However, he added, Vietnamese rice typically sold at lower prices than other exporting nations.
He said the rice industry should focus on increasing its competitiveness, balancing the benefits of stakeholders in the value-added chain and ensuring fair benefits.
"There must be better application of technology that allows farmers to use less water, save input costs and reduce the use of pesticides and fertilizers," he said.
At the conference, participants heard that in Quang Binh Province, with support from the SNV Netherlands Development Organisation, small rice farmers were able to benefit from efforts to reduce input costs, improve water management, use better sowing techniques and improve soil fertility.
The three-year (2012-14) project also forged stronger links between rice farmers and businesses.
Nguyen Van Vuong of the Plant Department under the Ministry of Agriculture and Rural Development said lack of support and infrastructure for rice research and development was a problem facing the industry.
He singled out the lack of research in post-harvest technology as a major development hurdle.
Vuong said the country had been largely focused on exporting rice to markets that do not demand high quality because it did not have enough facilities as well as qualified scientists to research high-value rice varieties.
He said the industry needed more high-quality varieties that can resist insects and adapt to changing weather patterns.
Luong Van Vuong, an official with the Thai Nguyen Plant Protection Bureau, said his province suffered significant loss of agricultural land due to urbanisation and development of industrial parks.
Small farmers, therefore, were still struggling with finding output markets and their production was largely fragmented, he said.
"We need to increase awareness among farmers and support them in increasing productivity and lowering input costs," he said.
Tran Thu Thuy, head of the Phu Tho Plant Bureau, said the province was looking at ways to better connect rice processors and exporters with farmers.
She said she hoped that the Government would provide further support for localities where farmers had had their rice crop damaged or lost to disasters or diseases.
Ca Mau earns over 1 billion USD from exports
The southern province of Ca Mau posted an export turnover of 1.2 billion USD so far this year, a year-on-year increase of 80 million USD, according to the provincial Department of Industry and Trade.
This is the second consecutive year Ca Mau earns more than 1 billion USD from exports, mostly seafood products.
Ly Van Thuan, General Secretary of the Ca Mau Seafood Processors’ Association, said the result is attributable to efforts of 33 local seafood processing enterprises to improve their performance, noting that the number of profitable companies has increased from five in 2013 to 18 a year later.
Minh Phu company alone expects to gain 500 million USD in export turnover.
Besides, 150,000 aquaculture farms and tens of thousands of fishermen contributed substantially to this year’s success by ensuring material supply for processing factories, he added.
The locality plans to hit 1.3 billion USD of export value by the end of this year.
Vietnam keen to attract more foreign investors
Registered and disbursed foreign direct investment (FDI) along with the issuance of investment certificates in the first ten months of this year have been consistent with a stable business climate, radio the Voice of Vietnam quoted Minister of Planning and Investment Bui Quang Vinh as saying.
Though Vietnam has become more attractive with its tax incentives, low-cost labour, and long coastline and its increasingly modern port infrastructure, FDI attraction policies still naturally face some challenges, according to Dr. Nguyen Dinh Cung, Director of Central Institute for Economic Management (CIEM),
To overcome these obstacles and continue to attract more FDI in the future, Vietnam needs to take a long-range view and develop a national strategy that embraces FDI as a powerful driver for sustainable economic development, Cung said.
According to the Foreign Investment Agency (FIA) during the 10 month period, newly registered FDI capital dipped by 23.9 percent to 9.95 billion USD, representing a total of 1,306 projects.
Meanwhile the FIA reported supplementary capital for existing projects dipped 39.1 percent to 3.74 billion USD for 469 projects.
FIA Deputy Director Nguyen Noi said the declining FDI registered capital was principally due to the reduction in the number of large scale projects this year as compared to 2013.
There were fewer projects having capital of more than 1 billion USD each this year while the overwhelming majority (70%) of FDI projects had registered capital of under 5 million USD that was the main cause of a decline in FDI capitalisation this year, Noi explained.
However, Tran Duy Dong, Director of the Ministry of Planning and Investment (MoPI)’s Economic Zone Management Department, said in fact many foreign investors continued to pour investment into their business in Vietnam. Dong cited the Samsung CE Complex and Samsung Display Bac Ninh projects, which each has registered capital of more than 1 billion USD, as prime examples of the confidence of foreign investors in the country.
Foreign invested enterprises contributed 82.48 billion USD to the nation’s export revenues (including crude oil), up 13.6 percent and comprising 67 percent of the country’s total export value.
All this adds up to the simple fact that Vietnam has continued to remain a safe and attractive destination for foreign investors, Dong concluded.
To improve FDI attraction, FIA Director Do Nhat Hoang says the agency has set a target to attract large-scale projects with more competitive products and plans to join global value chains of multinational groups.
At the same time the agency will pay appropriate attention to small-and-medium sized projects and strike a balance between the two. Furthermore, FDI attraction would focus on the supporting industry, construction, services, and agro-forestry, Hoang said, noting that in the exploitation of natural resource, only projects using advanced and environmentally friendly technologies and machines will be granted licences.
To realise the target, Vietnam should have proper strategies to attract investors. “Currently, some Vietnam localities, such as like Binh Duong, have been better at attracting foreign investment, because local authorities support businesses and have timely and clear investment procedures. The model should be expanded in the future” says Professor Nguyen Mai.
Meanwhile, Dr.Nguyen Dinh Cung said localities should outline clear and specific criteria for choosing investors and offer transparent policies for mutual benefit.-
Vietnam fruit appeals overseas markets
As a tropical country, Vietnam has year-round orchards, which is an advantage for fruit exports that few countries have, the Communist Party of Vietnam Online Newspaper reported.
Recently, a good sign from the US market is that the country will import the additional two fruits of litchi and longan from Vietnam. Vietnam also has plans to export fruits such as star apple, dragon fruit, rambutan, litchi and mango to demanding markets like the US, Japan, Australia, New Zealand and Taiwan.
According to Nguyen Xuan Hong, Head of the Department of Plant Protection under the Ministry of Agriculture and Rural Development, Vietnam has many advantages for exporting fruit compared to many other countries. Vietnam’s delicious fruits include dragon fruit; mango, litchi and many countries want to import fruits from Vietnam.
Nguyen Xuan Hong added that besides dragon fruit and rambutan, US’s import of Vietnamese litchi and longan is a move to help open up opportunities for Vietnam’s fruits to further penetrate the US market as well as other demanding markets. At the same time, it creates an opportunity for horticulture exporters to gradually decrease dependence on the Chinese market and ensure sustainable growth.
However, he also warned that to export fruits to the demanding markets such as the EU, Japan and the US, it requires to meet their standards on food safety, use measures such as irradiation and hot steam treatment. Major producers have to have traceability systems such as a code system for planting, storage, treatment, packaging and distribution facilities.
Since 2008, dragon fruit has been exported to the US market and the export output to the market has increased from 100 tonnes in 2008 to 1,000 tonnes in first six months of 2014.
Despite strong competition with Thailand and Mexico, the advantage of Vietnam’s rambutan is that it can be produced all the time, providing the country with a stable output.
When penetrating new markets, a problem arising is how to meet the import requirements of purchasing countries. At present, Vietnam’s most difficult thing is small and scattered production scale. Post-harvest storage technology is the weakest element in the value chain of commodity production. Litchi is an example. If there is no storage process to ensure required quality, it will be difficult to penetrate the US market.
According to the Ministry of Agriculture and Rural Development, in nine months, the vegetable and fruit export reached 1.1 billion USD, up 39 percent compared to the same period in 2013.
Of the 10 vegetable and fruit export markets of Vietnam, China is still the largest market, accounting for 28.6 percent of market share, closely followed by Japan, the Republic of Korea and the US but with a very small market share 4.74 percent, 3.76 percent and 3.44 percent respectively.
It is expected that at the end of 2014 or 2015, Vietnam will continue to export star apple and mango to the US; red dragon fruit and mango to Japan; dragon fruit to Taiwan (China); rambutan to New Zealand; dragon fruit, litchi and mango to Australia.
With practical support of the state and international organisations as well as appropriate investment in cultivation, production development, Vietnam’s fresh fruit export revenue to the EU, the US and other demanding markets in particular and the world market in general will increase in coming years, making Vietnam become a fruit export centre of the Asian region, said the Communist Party of Vietnam Online Newspaper.
Vietnamese, Russian state audit agencies boost bilateral ties
A new agreement to intensify cooperation in auditing between Vietnam and Russia was signed at a meeting between the two countries’ audit chiefs in Moscow on November 18.
During the meeting, Auditor General of the State Audit Office of Vietnam Nguyen Huu Van and Chairwoman of the Accounts Chamber and head of the Supreme Audit Institution of Russia Tatyana Golikova expressed their delight at the close coordination of the two state audit agencies, which, they said, has contributed remarkably to consolidating and developing the two countries’ relations.
They discussed priority fields for cooperation in the time ahead, agreeing to focus on the nuclear energy sector.
They decided to conduct joint auditing over the implementation of an inter-governmental agreement on building the Ninh Thuan 1 nuclear power plant in Vietnam and the operations of joint ventures Vietsovpetro and Rusvietpetro in 2016.
The two sides also affirmed their willingness to expand cooperation in training and retraining auditors.
The Russian audit chief proposed training Vietnamese students in finance and state auditing majors at Russia’s universities.
Both also agreed to completely support each other at the International Organisation of Supreme Audit Institutions (INTOSAI) and the Asian Organisation of Supreme Audit Institutions (ASOSAI).
SBV: Exchange rate remains unchanged
The State Bank of Vietnam (SBV) affirmed that it will make no change to the USD/VND exchange rate in a document sent to the media on November 18.
An overall market review conducted by the bank revealed that the currency supply and demand remained stable as no large transactions had made in the market.
In the first ten months of this year, the country ran a trade surplus of 2.36 billion USD and the overall balance of payments had a high surplus of over 11 billion USD.
In addition, FDI disbursement and remittances remained higher than the same period last year and they are expected to increase in the coming time.
The central bank pledged to continue to regulate monetary policy tools efficiently with a view to safeguarding the foreign exchange market’s stability.
Vietnam, Russia boost labour cooperation
Vietnamese Ambassador to Russia Nguyen Thanh Son and Russian Minister of Federal Migration Service (FMS) Konstatin O.Romodanovsky discussed a range of measures to step up labour partnership between the two countries during talks in Moscow on November 17.
The two sides agreed to early work out a specific cooperation plan in the field, including sharing information, exchanging experts, and jointly addressing legal problems relating to the Vietnamese community in Russia.
Ambassador Son suggested establishing a Vietnam-Russia coordination group to promptly address legal matters according to the humanitarian spirit and the bilateral comprehensive strategic partnership.
He initiated the expansion of labour collaboration in the fields of agriculture and light industry.
Minister Romodanovsky welcomed the Ambassador’s suggestions and said the FMS will create all favourable conditions for Vietnamese expatriates to live and work in the host society, in line with the policy of Russian President Vladimir Putin.
Vietnam implements plan of action to develop shipbuilding industry
A comprehensive action plan is now in place to propel the growth of the local shipbuilding industry, the Vietnam Investment Review reported on November 17.
The action plan to develop the industry submitted by the Ministry of Transport (MoT) was just approved by the Prime Minister as part of the Vietnam-Japan cooperative framework to 2020, with vision towards 2030.
“The action plan carries the dual target of reviving the industry and changing the perception that Vietnam could only build low-grade ships,” Deputy Minister of Transport Nguyen Van Cong was quoted as saying.
A major highlight in the action plan includes Vietnam's pursuing the target of quickly and strongly developing the shipbuilding industry to grab a bigger share in the world shipbuilding market.
Priority will be placed on manufacturing product lines suitable to the industry’s current capacity and existing market demands.
From now until 2020, the shipbuilding industry will be obligated to fulfil three targets of posting an average growth rate of 5-7 percent in annual total value. It will also allocate 70-80 percent of its production capacity to serve the domestic market, and has set a target of ship export volume of 1.76-2.16 million tonnes per year, equal to a 0.48 percent share of the world’s shipbuilding market.
To realise this vision, three specialised shipbuilding complexes will shortly be established in the north, centre and south focusing on building ships based on existing infrastructure with support from Japan and the Republic of Korea.
The first step in the 6-year action plan will be to sharply reduce the number of shipyards before consolidating them into larger, more efficient developments.
Ship repair facilities will also be a key focus. Vietnam will set aside resources to establish three large-scale ship overhaul centres employing state-of-the art repair technologies in the three regions, linking them to existing ports and international shipping lines.
In the period to 2020, these repair yards will meet 90 percent of the demand for repairing low-grade ships and 60-70 percent of the demand for medium-grade ships.
According to the MoT assessment, existing ship repair facilities can only meet 46 percent of the demand of the national fleet.
Vietnam currently spends 75 million USD getting ships repaired abroad despite having 120 facilities capable of carrying out repair work.
In respect of near-term plans, the MoT said it would preside over the establishment of three shipbuilding complexes and the building of several core businesses while creating a fund to support shipbuilding industry development from 2015-2020.
Other important tasks are forming strategic partnership relations between potential investors and domestic shipbuilding firms, shaping associated support industries, and defining which types of vessels are in high demand.
Concrete policies needed to lure more FDI: experts
A light decrease in foreign direct investment (FDI) into Vietnam over the last 10 months prompted experts to ask for the introduction of a market-oriented attraction strategy along with post-licensing caring services for operating investors.
According to Nguyen Dinh Cung, head of the Central Institute for Economic Management, the attraction of FDI should be considered as an important and effective driving force of the country’s economic development in policies outlined to reel in foreign investments.
The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) reported that by October 20 the country drew 13.7 billion USD, in FDI, which is equivalent to 71.2 percent of the same period a year earlier.
The figure included 9.95 billion USD from 1,306 newly-licensed projects and 3.74 billion USD as additional capital required by the 469 underway projects.
The decline was attributed to fewer large-scale projects than last year – the situation that was forecast at the beginning of the year, according to Nguyen Noi, FIA deputy head.
Projects with less than 5 million USD currently account for about 70 percent of total FDI projects, he noted.
Experts shared the view that the investment and business environment in the country remained uncompetitive regionally.
FDI disbursement, however, picked up speed, rising by 5.9 percent year on year, with 10.15 billion USD. It is predicted that the rate could reach 8.7 percent with 12.5 billion USD for the full year.
Over the reviewed period, FDI firms earned 82.48 billion USD from exports, up 13.6 percent year on year. The amount accounted for 67 percent of the country’s total revenue, according to FIA.
Head of MPI Department of Economic Zone Management Tran Duy Dong remained very optimistic about the country’s FDI attraction.
He cited the two recently-licensed projects - the 1.4 billion USD Samsung CE Complex in Ho Chi Minh City and the over 1 billion USD Samsung Display in northern Bac Ninh – as examples.
Do Nhat Hoang, FIA head, said in the following years FDI will be sought for projects manufacturing global value chain products.
The source of capital will also be hunted for the industry-construction, service, agro-forestry, and especially the support industry, he said.
Nguyen Dinh Cung, head of the Central Institute for Economic Management, suggested localities define clearly their criteria to choose investors, while applying transparent and equal policies to ensure win-win benefits.
MPI Minister Bui Quang Vinh affirmed that the country has taken maximum efforts to make the investment and business environment better and more attractive.
He expressed his belief that Vietnam could lure 15-16 billion USD in FDI this year.
HCM City aims to attract more Japanese investors
Japanese businesses are becoming more interested in Ho Chi Minh City, as a matter of fact, the city has signed many cooperation programmes with Japanese localities, said the Vietnam Economic News.
Since the beginning of this year, Ho Chi Minh City leaders have received many Japanese business delegations and high ranking Japanese officials on their visits to Vietnam to explore business opportunities in the city.
Ho Chi Minh City has become the most attractive Vietnamese locality to Japanese investors. Currently, Japanese businesses have 668 investment projects in the city with total capital amounting to 25 billion USD. The city is expected to receive more investment from Japanese businesses in the time to come.
Recently, Saitama Prefecture Governor Kyoshu led a delegation to visit Ho Chi Minh City. He said that Saitama Prefecture had advantages in the field of cosmetics production, safe vegetables and electronic technology. Currently, 58 companies from Saitama Prefecture are operational in Vietnam and they highly appreciated the investment environment as well as the abundance of human resources in Vietnam.
As many as 150 Japan's Ehime Prefecture and Vietnamese businesses took part in a recent workshop in HCM City to exchange information and seek their partners. Ehime Prefecture’s Association of Small and Medium-sized Enterprises and the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) signed a memorandum of understanding (MOU), under which the two sides would create the best conditions for businesses from Ehime Prefecture to invest in export processing and industrial zones (EPZs and IZs) in the city.
Under the MOU, the two sides will share information and promote exchanges between Vietnamese and Japanese businesses. Ehime Prefecture’s Association of Small and Medium-sized Enterprises will act as a bridge between the Ehime Prefecture's businesses and HCM City's businesses to seek investment opportunities in Ho Chi Minh City. HEPZA will provide them with information and consultancy and help them complete administrative procedures required for investment in EPZs and IZs in Ho Chi Minh City.
According to Head of HEPZA Vu Van Hoa, Ho Chi Minh City currently has 16 EPZs and IZs with total area of 3,614ha; these EPZs and IZs have attracted 1,314 investment projects with total capital of 8.83 billion USD, generating jobs for 275,000 workers (these include 528 projects with foreign direct investment with total capital of about 5 billion USD). Businesses based in Ho Chi Minh City’s EPZs and IZs have earned annual import, export value of nearly 4 billion USD.
Vu Van Hoa added that the Ho Chi Minh City local government offered FDI businesses treatment of preference and encouraged them to invest in the fields of electricity, electronics, petrochemicals, engineering and food processing.
Investors look to lease properties
Last year, most apartments in Vietnam were bought by owner-residents, but this year, it seems that many more buyers are interested in leasing them.
A survey of 5,000 customers by a property trading floor in Hanoi over the past three years shows that long-term investment in high-end apartments for leasing in the centre of the city has increased from 11 percent in 2012 to 15 percent in 2014.
About 20 to 25 percent of customers buy an apartment with the intention of leasing, said the property trader.
Investors, who buy apartments from high-end projects in Hanoi and Ho Chi Minh City such as at Indochina Plaza Hanoi, Dolphin Plaza and Starcity Le Van Luong, can earn a rental yield of about six to seven percent a year.
The investment is considered more profitable than putting money in banks.
Tran Binh, an investor in Royal City in Hanoi, said that his 100sq.m apartment could bring him about 1,000 USD to 1,200 USD per month.
The income from a rental house is not high but it is stable, he added. Investors also expect that housing prices will increase as the property market is warming up.
Buyers are often encouraged with the offer of rental services by developers. For example, development companies in the Watermark project introduced a programme of supporting buyers to find customers and committed to a rental yield of seven percent per year.
According to the property-service provider CBRE Group, the number of customers asking for apartments to lease has increased. The rental prices now range from 2,000 USD to 4,000 USD, nearly double that for the same period last year.
However, the supply of high-end apartments in central districts in Hanoi is expected to narrow following Decision 996/QD-TTg signed by Prime Minister Nguyen Tan Dung to end construction of commercial housing projects in the area.
The decision is a part of a programme on housing development in Hanoi for 2012-2020 and towards 2030. Priority will be given to construction of urban areas and residential areas on the city's outskirts. The decision also puts a temporary end to new commercial housing projects in the city's four downtown districts - Dong Da, Hoan Kiem, Ba Dinh, Hai Ba Trung and part of southern Tay Ho district.
Experts said although leasing apartments was an attractive investment, customers, mainly foreigners, mostly showed interest in apartments in the centre of the city with good security.
Sugarcane prices drop amidst peak harvest time
The Vietnam Sugar and Sugarcane Association said that the Mekong Delta has entered peak harvest time of sugarcane crop this year but sugarcane prices have drastically reduced bedeviling local farmers.
Traders pay as low as VND650-750 a kilogram at some places in Hau Giang, Soc Trang and Ca Mau Provinces, resulting in farmers’ losses.
Deputy Director of Can Tho Sugar Company Nguyen Hoang Ngoan said that sugar prices felt down and high stock volume had also pulled down the sugarcane prices.
The sugar price has fallen from VND12,500 a kilogram in the beginning of the sugarcane crop to only VND11,500 now, which causes losses to processing plants also.
Sugarcane growers have converted into farming other plants because it is the third consecutive year they suffer losses.
Finland assists Vietnamese exporters to enter Northern Europe market
The Finnish Government has funded a Vietnam Chamber of Commerce and Industry (VCCI)’s project assisting Vietnamese businesses to export seafood and agricultural products to the country and other markets in Northern Europe.
The announcement has been made at a seminar hosted by VCCI recently.
Stating at the seminar, representative of Finnsea Consulting Company said that Finland with population of only five million people, is considered as a gateway to enter other markets in the Northern Europe such as Norway, Sweden, Demark, Estonia, Latvia and Litva, and Russia.
However, Vietnamese enterprises have not approached this market, yet. Almost Vietnamese seafood products have been indirectly exported to Finland via another country.
VCCI project will help Vietnamese companies to export domestic products to the Northern Europe market and seek suitable foreign partners.
Transport association prompts businesses to cut freight rate
Ho Chi Minh City Cargo Transport Association yesterday sent a document to transport companies, asking them to lower freight rates as petrol prices have reduced the ninth consecutive time.
Fuel cost accounts for 40-50 percent of auto transport fee, said the association.
Because fuel prices are regularly changed in Vietnam, transport companies and their customers have reached a verbal agreement to adjust the freight rate when fuel prices increase or reduce from 5 to 10 percent.
Diesel price has fallen by 15.7 percent recently. Therefore the association recommended their members to recalculate and reduce the freight rate.
Consumer law implementation faces with many difficulties
Implementation of Consumer Protection Law taking effect since 2011 has seemed to be confused with many difficulties, said delegates at a forum hosted in the southern province of Ba Ria – Vung Tau on November 17 and 18.
Authorized agencies namely departments of industry and trade have not had a division or even officials in charge of implementation of the law as per regulations.
Leaders from departments of industry and trade said that trade activities have more and more extended in local, regional and international markets in an attempt to integrate the international process, aiming to improve legal documents and effectiveness of consumer right protection.
The National Assembly passed the Consumer Protection Law at the 8th session on November 17, 2010. After taking effect on July 1 in the following year, it has contributed in protecting rights and legitimate benefits for consumers.
The forum was organized by Vietnam Competition Authority under the Ministry of Industry and Trade and Japan International Cooperation Agency. Among the attendees were leaders from departments of industry and trade and southern provinces from Binh Thuan.